Latest LIRR Labor Offer Could Cost MTA Another $40 Million

The Metropolitan Transportation Authority’s latest offer to Long Island Rail Road unions could cost an additional $40 million a year in labor expenses, the agency said Wednesday.

The LIRR unions have been locked in tense negotiations with the MTA as a potential strike looms as soon as July 20.

Thomas Prendergast, the authority’s chairman and chief executive, said Wednesday that $40 million was the authority’s estimate of how much terms recommended by federal mediators would cost.

The MTA would likely pay for those added expenses by reducing how much it spends on capital projects, Mr. Prendergast said.

Earlier this year, the MTA estimated it would have to reduce such capital spending by $70 million a year starting in 2015 if the railroad and other unions settled for deals similar to one reached in April with the Transport Workers Union Local 100, which represents employees who run New York City’s subway and bus system.

Mr. Prendergast said federal mediators’ recommendation would force the authority to pare such capital spending by $40 million more annually, bringing the annual capital spending reduction to an estimated $110 million. Such funds are set aside to pay for construction and maintenance directly, or to back bonds issued to finance the projects.

These estimated reductions in capital spending assumes the LIRR unions agree to the MTA’s latest offer, which the authority says is based on the federal mediators’ recommendations. The estimate also assumes unions representing Metro-North Railroad employees would agree to the same terms.

“We’ve scraped all of the other available cash cupboards bare to get the TWU deal,” Mr. Prendergast said after the authority’s board meeting Wednesday. “So when we say we can afford it within the financial plan, we are affording it at great sacrifice.”

The MTA’s latest offer to LIRR unions calls for 17% wage increases in a deal covering seven years, including retroactive pay going back to 2010, when the LIRR employees’ contract expired.

Concessions sought by the MTA include requiring current employees to contribute 2% of their regular pay toward health-care costs and new employees to contribute 4% for their coverage. LIRR employees currently don’t contribute toward health-care costs.

Federal mediators had recommended requiring current LIRR employees to contribute 1% of their regular pay toward health-care in 2010, with their contributions escalating to 2.25% in 2015.

An earlier offer by the authority would have given LIRR employees 11% in wage increases over a six-year period. The unions had been pushing for 17% in pay bumps over a six-year term, and federal mediators sided with them in May.

The MTA and LIRR unions had agreed to meet on Friday. But the MTA’s decision to publicize its latest offer on Tuesday irked the railroad’s unions, who signaled they are debating whether even to meet, according to Anthony Simon, leader of a coalition of LIRR unions.

“Instead of sitting down with the only people who can make a deal, (the) MTA chose the route of cheap political grandstanding,” Mr. Simon said in a statement. “It’s painfully clear (the) MTA is not serious about negotiating a settlement.”